Revenue of $15.5 million a 1% Decrease to Revenue of $15.6 million
in Last Year’s Third Quarter

Net Earnings Attributable to Common Shareholders of $2.5 million,
or $0.21 per Diluted Share, compared to ($1.2) million, or ($0.11) per
share in Last Year’s Third Quarter

Adjusted Funds from Operations Decreased to $2.2 million, or $0.18
per Diluted Share, a 34% Decrease from $3.3 million in Last Year’s
Third Quarter Caused Primarily by a $740k Increase in Interest Expense

Hotel EBITDA Decreased to $6.2 million from $6.3 million, and
Adjusted EBITDAre Decreased 5% Over Last Year’s Third Quarter

THIRD QUARTER PORTFOLIO ACCOMPLISHMENTS

Sold One Legacy Asset Generating $5.1 million in Gross Proceeds

MANAGEMENT COMMENTARY

Bill Blackham, Condor’s Chief Executive Officer, commented:

“On September 27, 2018, Condor initiated a process to evaluate strategic
alternatives to enhance shareholder value. Until the conclusion of this
process, Condor is suspending the issuance of earnings guidance and the
holding of earnings conference calls. This past quarter we signed a
contract to sell the sole remaining legacy asset, the Quality Inn
Solomons Island. While currently scheduled to close by year-end, there
can be no guarantee that this planned disposition will close. This final
asset sale will bring the total number of legacy assets sold to 55 since
Condor launched the strategic repositioning of its portfolio in 2015.”

* Please see the Reg. G reconciliation tables at the end of this
release.

PORTFOLIO ACTIVITYThe Company’s investment strategy is to
assemble a portfolio of premium-branded, select-service hotels in the
top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus
on MSAs ranked between 20 to 60. Since restarting its portfolio
transformation in 2015, the Company has acquired 14 high-quality
select-service hotels representing 1,808 rooms in its target markets for
a total purchase price of approximately $277 million. Additionally,
during this time, the Company has sold 54 legacy assets for a total
gross sales price of approximately $166 million.

AcquisitionsDuring the third quarter of 2018, the Company
did not acquire any hotels.

DispositionsDuring the third quarter of 2018, the Company
sold the Super 8 in Creston, IA for $5.1 million. Net proceeds from the
sale were applied to outstanding debt on the Company’s $150 million
secured credit facility. The Company has only one legacy hotel remaining
in the portfolio.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITYAs of September
30, 2018, the Company had cash and cash equivalents (including
restricted cash) of $11.0 million and available revolver borrowing
capacity of $7.6 million. As of September 30, 2018, the Company had
total outstanding long-term debt of $138.2 million associated with
assets held for use with a weighted average maturity of 2.4 years and a
weighted average interest rate of 4.90%.

During the third quarter of 2018, the Company did not sell any shares of
common stock under the ATM program.

CAPITAL INVESTMENTSThe Company invested $1.5 million in
capital improvements throughout the portfolio in the nine months ended
September 30, 2018, to upgrade its properties and maintain brand
standards.

OUTLOOK AND GUIDANCEDue to the pursuit of Strategic
Alternatives, the Company has suspended guidance until further notice.

DIVIDENDSOn September 5, 2018, the Board of Directors
declared a quarterly cash common stock dividend of $0.195 per share for
the third quarter of 2018. The common stock dividend represented an
annualized yield of approximately 7.5% based on the closing price of the
Company’s common shares on September 7, 2018. The third quarter dividend
was paid on October 3, 2018 to shareholders of record as of September
21, 2018.

EARNINGS CALLDue to the pursuit of Strategic Alternatives,
the Company will not be conducting a third quarter earnings conference
call.

About Condor Hospitality Trust, Inc.Condor Hospitality
Trust, Inc. (NYSE American:CDOR) is a self-administered real estate
investment trust that specializes in the investment and ownership of
upper midscale and upscale, premium-branded, select-service,
extended-stay, and limited-service hotels in the top 100 Metropolitan
Statistical Areas (“MSAs”) with a particular focus on the top 20 to 60
MSAs. The Company currently owns 16 hotels in 8 states. Condor’s hotels
are franchised by a number of the industry’s most well-regarded brand
families including Hilton, Marriott, and InterContinental Hotels.

Forward-Looking StatementCertain matters within this press
release are discussed using forward-looking language as specified in the
Private Securities Litigation Reform Act of 1995, and, as such, may
involve known and unknown risks, uncertainties and other factors that
may cause the actual events, results or performance to differ from those
projected presented in the forward-looking statement. These
forward-looking statements are based on assumptions that management has
made in light of experience in the business in which the Company
operates, as well as other factors management believes to be appropriate
under the circumstances. As you read and consider this release, you
should understand that these statements are not guarantees of events,
performance or results. They involve risks, uncertainties (some of which
are beyond the Company’s control) and assumptions. Although management
believes that these forward-looking statements are based on reasonable
assumptions, you should be aware that many factors could affect events,
performance or results and cause them to differ materially from those
anticipated in the forward-looking statements. These factors include
among other things, risk factors described from time to time in the
Company’s filings with the Securities and Exchange Commission. The
Company cautions that any forward-looking statement included in this
press release is made as of the date of this press release and the
Company does not undertake to update any forward-looking statement.

Non-GAAP financial measures are measures of our historical financial
performance that are different from measures calculated and presented in
accordance with accounting principles generally accepted in the United
States of America (“GAAP”). We report Funds from Operations (“FFO”),
Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation,
and Amortization (“EBITDA”), EBITDA for real estate (“EBITDAre”),
Adjusted EBITDAre, and Hotel EBITDA as non-GAAP measures that we
believe are useful to investors as key measures of our operating results
and which management uses to facilitate a periodic evaluation of our
operating results relative to those of our peers. Our non-GAAP measures
should not be considered as an alternative to U.S. GAAP net earnings as
an indication of financial performance or to U.S. GAAP cash flows from
operating activities as a measure of liquidity. Additionally, these
measures are not indicative of funds available to fund cash needs or our
ability to make cash distributions as they have not been adjusted to
consider cash requirements for capital expenditures, property
acquisitions, debt service obligations, or other commitments.

FFO and AFFO

The following table reconciles net earnings (loss) to FFO and AFFO for
the three and nine months ended September 30, 2018 and 2017 (in
thousands). All amounts presented include our portion of the results of
our unconsolidated Atlanta JV.

We calculate FFO in accordance with the standards established by the
National Association of Real Estate Investment Trusts (“NAREIT”), which
defines FFO as net earnings or loss computed in accordance with GAAP,
excluding gains or losses from sales of real estate assets, impairment,
and the depreciation and amortization of real estate assets. FFO is
calculated both for the Company in total and as FFO attributable to
common shares and common units, which is FFO reduced by preferred stock
dividends. AFFO is FFO attributable to common shares and common units
adjusted to exclude items we do not believe are representative of the
results from our core operations, including non-cash gains or losses on
derivatives and convertible debt, stock-based compensation expense,
amortization of certain fees, losses on debt extinguishment, and in-kind
dividends above stated rates, and cash charges for acquisition and
equity transaction costs. All REITs do not calculate FFO and AFFO in the
same manner; therefore, our calculation may not be the same as the
calculation of FFO and AFFO for similar REITs.

We consider FFO to be a useful additional measure of performance for an
equity REIT because it facilitates an understanding of the operating
performance of our properties without giving effect to real estate
depreciation and amortization, which assumes that the value of real
estate assets diminishes predictably over time. Since real estate values
have historically risen or fallen with market conditions, we believe
that FFO provides a meaningful indication of our performance. We believe
that AFFO provides useful supplemental information to investors
regarding our ongoing operating performance that, when considered with
net income and FFO, is beneficial to an investor’s understanding of our
operating performance. We present FFO and AFFO per common share and
common unit because our common units are redeemable for common shares.
We believe it is meaningful for the investor to understand FFO and AFFO
applicable to common shares and common units.

EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

The following table reconciles net earnings (loss) to EBITDA, EBITDAre,
Adjusted EBITDAre, and Hotel EBITDA for the three and nine months
ended September 30, 2018 and 2017 (in thousands). All amounts presented
our portion of the results of our unconsolidated Atlanta JV.

General and administrative expense, excluding stock compensation and
LTIP expense

1,352

1,194

4,161

4,040

Other expense, net

23

43

57

83

Unallocated hotel and property operations expense

81

111

229

308

Hotel EBITDA

$

6,201

$

6,326

$

21,585

$

16,000

Revenue

$

15,462

$

15,562

$

49,975

$

40,175

JV revenue

2,485

2,439

7,587

7,279

Condor and JV revenue

$

17,947

$

18,001

$

57,562

$

47,454

Hotel EBITDA as a percentage of revenue

34.6%

35.1%

37.5%

33.7%

We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by
adding back to net earnings or loss certain non-operating expenses and
certain non-cash charges which are based on historical cost accounting
that we believe may be of limited significance in evaluating current
performance. We believe these adjustments can help eliminate the
accounting effects of depreciation and amortization and financing
decisions and facilitate comparisons of core operating profitability
between periods. In calculating EBITDA, we add back to net earnings or
loss interest expense, loss on debt extinguishment, income tax expense,
and depreciation and amortization expense. NAREIT adopted EBITDAre
in order to promote an industry-wide measure of REIT operating
performance. We adjust EBITDA by adding back net gain/loss on
disposition of assets and impairment charges to calculate EBITDAre.
To calculate Adjusted EBITDAre, we adjust EBITDAre to add
back acquisition and terminated transactions expense and equity
transactions expense, which are cash charges. We also add back stock
–based compensation expense and gain/loss on derivatives and convertible
debt, which are non-cash charges. EBITDA, EBITDAre, and Adjusted
EBITDAre, as presented, may not be comparable to similarly titled
measures of other companies.

We believe EBITDA, EBITDAre, and Adjusted EBITDAre to be
useful additional measures of our operating performance, excluding the
impact of our capital structure (primarily interest expense), our asset
base (primarily depreciation and amortization expense), and other items
we do not believe are representative of the results from our core
operations.

The Company further excludes general and administrative expenses, other
non-operating income or expense, and certain hotel and property
operations expenses that are not allocated to individual properties in
assessing hotel performance (primarily certain general liability and
other insurance costs, land lease costs, and office and banking fees)
from Adjusted EBITDAre to calculate Hotel EBITDA. Hotel EBITDA,
as presented, may not be comparable to similarly titled measures of
other companies.

Hotel EBITDA is intended to isolate property level operational
performance over which the Company’s hotel operators have direct
control. We believe Hotel EBITDA is helpful to investors as it better
communicates the comparability of our hotels’ operating results for all
of the Company’s hotel properties and is used by management to measure
the performance of the Company’s hotels and the effectiveness of the
operators of the hotels.

Same-Store Revenue and Hotel EBITDA

The following tables present our same-store revenue, Hotel EBITDA, and
Hotel EBITDA margin broken down by property type for the three and nine
months ended September 30, 2018 and 2017 (in thousands) and reconcile
these same-store measures to total revenue and Hotel EBITDA as presented
above. Same-store results include all our hotels owned at September 30,
2018, with the exception of the Austin TownePlace Suites (opened on
January 3, 2017) and the Summerville Home2 Suites (opened on July 18,
2017), for which prior period results are not available for all periods
presented, and reflect the performance of these hotels during the entire
period, regardless of our ownership during the period presented. Results
for the hotels for periods prior to our ownership were provided to us by
prior owners and have not been adjusted by us or audited or reviewed by
our independent auditors. All amounts presented include our portion of
the results of our unconsolidated Atlanta Aloft JV. Results for periods
prior to the Company’s ownership have not been included in the Company’s
actual consolidated financial statements and are included here only for
comparison purposes.

Revenue - Reconciliation of Actual to Same-Store

Three months ended September 30,

Nine months September 30,

2018

2017

2018

2017

Condor and JV Revenue - Actual

$

17,947

$

18,001

$

57,562

$

47,454

Revenue earned on properties owned at September 30, 2018 prior to
the Company's ownership, excluding the Austin TownePlace Suites, and
the Summerville Home2 Suites

-

1,251

-

11,441

Revenue earned on properties disposed of prior to September 30, 2018
during the period of ownership

The following tables present our same-store occupancy, ADR, and RevPAR
for all our hotels owned at September 30, 2018, with the exception of
the Austin TownePlace Suites (opened on January 3, 2017) and Summerville
Home2 Suites (opened on July 18, 2017), for which prior period results
are not available for all periods presented. Same-store occupancy, ADR,
and RevPAR reflect the performance of hotels during the entire period,
regardless of our ownership during the period presented. Results for the
hotels for periods prior to our ownership were provided to us by prior
owners and have not been adjusted by us or audited or reviewed by our
independent auditors. The performance metrics for the hotel acquired
through our Atlanta JV, also presented below, reflect 100% of the
operating results of the property, including our interest and the
interest of our partner.

Three months ended September 30,

2018

2017

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

Solomons Hilton Garden Inn

79.65%

$

129.80

$

103.39

87.95%

$

123.26

$

108.40

Atlanta Hotel Indigo

72.60%

$

101.94

$

74.00

76.61%

$

100.78

$

77.20

Jacksonville Courtyard by Marriott

72.21%

$

113.52

$

81.97

72.49%

$

111.02

$

80.48

San Antonio SpringHill Suites

78.39%

$

125.19

$

98.14

77.73%

$

120.28

$

93.49

Leawood Aloft

78.96%

$

123.19

$

97.28

86.80%

$

125.95

$

109.32

Lexington Home2 Suites

84.65%

$

111.14

$

94.07

89.62%

$

112.21

$

100.55

Round Rock Home2 Suites

81.74%

$

113.74

$

92.97

81.96%

$

112.29

$

92.03

Tallahassee Home2 Suites

88.04%

$

114.45

$

100.77

80.46%

$

120.99

$

97.35

South Haven Home2 Suites

86.60%

$

112.06

$

97.05

91.48%

$

117.70

$

107.67

Lake Mary Hampton Inn & Suites

77.72%

$

122.32

$

95.06

80.09%

$

110.99

$

88.89

Austin Residence Inn

78.07%

$

124.16

$

96.93

75.97%

$

121.20

$

92.07

El Paso Fairfield Inn

82.52%

$

102.05

$

84.21

70.11%

$

105.23

$

73.77

Wholly owned new investment platform properties

79.87%

$

116.00

$

92.65

80.66%

$

115.45

$

93.12

Atlanta Aloft JV

76.16%

$

147.26

$

112.16

77.42%

$

142.37

$

110.23

Total new investment platform

79.31%

$

120.51

$

95.57

80.17%

$

119.35

$

95.69

Total legacy held for sale

64.00%

$

93.05

$

59.56

80.14%

$

88.98

$

71.31

Total Same-Store Portfolio

78.79%

$

119.74

$

94.34

80.17%

$

118.31

$

94.85

Austin TownePlace Suites (1)

69.66%

$

109.98

$

76.62

70.57%

$

115.46

$

81.48

Summerville Home2 Suites (1)

80.08%

$

126.55

$

101.35

52.12%

$

125.03

$

65.17

1 | Excluded from the total new investment platform calculation
because the hotel was not operational for the entirety of the nine
months ended September 30, 2017 (prior period results are not
available for all periods presented)

Nine months ended September 30,

2018

2017

Occupancy

ADR

RevPAR

Occupancy

ADR

RevPAR

Solomons Hilton Garden Inn

78.27%

$

126.07

$

98.68

80.80%

$

120.25

$

97.16

Atlanta Hotel Indigo

78.29%

$

103.45

$

80.99

74.52%

$

101.72

$

75.80

Jacksonville Courtyard by Marriott

80.13%

$

116.48

$

93.34

74.86%

$

114.31

$

85.57

San Antonio SpringHill Suites

84.56%

$

137.68

$

116.42

79.04%

$

131.58

$

104.00

Leawood Aloft

73.76%

$

127.81

$

94.27

82.48%

$

126.95

$

104.71

Lexington Home2 Suites

80.76%

$

112.71

$

91.02

83.62%

$

114.78

$

95.98

Round Rock Home2 Suites

85.50%

$

118.48

$

101.30

84.09%

$

119.68

$

100.64

Tallahassee Home2 Suites

86.77%

$

120.13

$

104.24

82.68%

$

123.16

$

101.83

South Haven Home2 Suites

86.44%

$

114.61

$

99.07

91.52%

$

117.01

$

107.09

Lake Mary Hampton Inn & Suites

81.98%

$

136.94

$

112.27

83.17%

$

120.73

$

100.41

Austin Residence Inn

81.85%

$

130.77

$

107.03

78.25%

$

132.38

$

103.59

El Paso Fairfield Inn

81.63%

$

100.67

$

82.18

72.53%

$

106.14

$

76.98

Wholly owned new investment platform properties

81.38%

$

120.54

$

98.10

80.38%

$

119.23

$

95.84

Atlanta Aloft JV

78.94%

$

147.26

$

116.24

81.26%

$

136.21

$

110.69

Total new investment platform

81.01%

$

124.45

$

100.82

80.51%

$

121.80

$

98.06

Total legacy held for sale

54.36%

$

87.46

$

47.54

79.44%

$

80.30

$

63.80

Total Same-Store Portfolio

80.10%

$

123.59

$

99.00

80.48%

$

120.40

$

96.89

Austin TownePlace Suites (1)

78.64%

$

117.84

$

92.68

64.83%

$

112.43

$

72.88

Summerville Home2 Suites (1)

85.10%

$

129.06

$

109.83

52.12%

$

125.03

$

65.17

1 | Excluded from the total new investment platform calculation
because the hotel was not operational for the entirety of the nine
months ended September 30, 2017

Condor Hospitality Trust, Inc.

Property List | As of the Date of this Release

New Investment Platform | Acquired from January 1, 2012 -
November 12, 2018

Hotel Name

City

State

Rooms

Acquisition Date

Purchase Price(in
millions)

1

Hilton Garden Inn

Dowell/Solomons

MD

100

05/25/2012

$11.5

2

SpringHill Suites

San Antonio

TX

116

10/01/2015

$17.5

3

Courtyard by Marriott

Jacksonville

FL

120

10/02/2015

$14.0

4

Hotel Indigo

College Park

GA

142

10/02/2015

$11.0

5

Aloft1

Atlanta

GA

254

08/22/2016

$43.6

6

Aloft

Leawood

KS

156

12/14/2016

$22.5

7

Home2 Suites

Lexington

KY

103

03/24/2017

$16.5

8

Home2 Suites

Round Rock

TX

91

03/24/2017

$16.8

9

Home2 Suites

Tallahassee

FL

132

03/24/2017

$21.5

10

Home2 Suites

Southaven

MS

105

04/14/2017

$19.0

11

Hampton Inn & Suites

Lake Mary

FL

130

06/19/2017

$19.3

12

Fairfield Inn & Suites

El Paso

TX

124

08/31/2017

$16.4

13

Residence Inn

Austin

TX

120

08/31/2017

$22.4

14

TownePlace Suites

Austin

TX

122

01/18/2018

$19.8

15

Home2 Suites

Summerville

SC

93

02/21/2018

$16.3

Total New Investment Platform

1,908

$288.1

Current Legacy Hotel Portfolio

Hotel Name

City

State

Rooms

Acquisition Date

Status(2)

16

Quality Inn

Solomons

MD

59

06/01/1986

HFS

Total

59

Total Portfolio | As of November 12, 2018

1,967

1 | Owned 80% by Condor

2 | HFS indicates the asset was marketed as held for sale at
September 30, 2018

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